Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

Read Source A2 from the insert.
(a)[9]

Prepare the total assets part of the statement of financial position at 31 December 2020, and show cash and cash equivalents as the balancing amount. Use the space provided for your workings.

(b)[3]

Calculate the working capital cycle measured in days.

(c)[3]

Compare D Limited's performance across both years by looking at the non-current asset turnover and the working capital cycle.

(d)[6]

Explain two likely reasons for the change in the ratio from 2019 to 2020.

(e)[4]

State four limitations that apply to ratio analysis.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Non-current assets: $438 000

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